ALFI UCITS IV implementation project â€“ KID Q&A Document

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ii:iii:A. We think that they are all acceptableAccording to ESMA/2012/592 examples (ii) and (iii) must also include astatement to the effect that the benchmark was different in the earlier period. In example (i), we see a risk that theinvestor will overlook the footnote and understand the chart to show that the benchmark has always been the TOPIX.We think that examples (ii) and (iii) are clearer in this respect.Art 18Q. Are these sample presentations of past performance acceptable?ALFI KID Q&A, Issue 1314, 11 April25 September 2012 Page 26
A. Yes, we think that both designs are permitted but they are at the limit of what is acceptable in terms of their use ofcolour.Q. Is the following example showing multiple share classes in one KID linked to a benchmark acceptable?% European Equity60.0040.0020.000.00-20.00-40.002000 2001 2002 2003 2004 2005 2006 2007 2008 2009European Equity - Share Class A - EUR -32.10 -20.60 -15.60 -7.40 -2.10 1.10 7.60 37.50 45.50 30.50European Equity - Share Class B - EUR -30.50 -19.50 -11.50 -5.70 0.10 -1.20 6.50 35.90 46.70 29.50European Equity - Share Class C - EUR -29.50 -18.90 -15.90 -9.10 -3.60 -2.20 7.70 34.90 44.30 28.50European Equity - Benchmark -33.60 -20.60 -14.90 -10.30 -2.20 1.10 7.00 30.30 40.20 32.60A. We think that the general idea of the table is acceptable but there are some aspects of it that are not acceptable.The performance numbers should be stated to one decimal place; the font size is too small; we think that the use ofcolour is at the limit of what is acceptable: the contrast between the colours is clear when the document is printed incolour or monochrome but it becomes difficult to see when the document is copied on a standard office photocopier.When they prepare multi-share class KIDs we recommend that practitioners take note of Recital 13 of the EURegulation 583/2010, which requires that the KID should not be "too complicated or crowded". Practitioners shouldalso take note of Art 18(2) of the EU Regulation 583/2010, which says that a benchmark may not be shown duringyears in which a UCITS does not exist. In this case, for as long as one or more share classes existed, we think that thebenchmark may be shown.Q. In the example above, if one of the share classes had only 3 years' performance history, would it bepermitted to show it on the 10-year chart, leaving 7 years blank?A. No. You may simulate the missing history under the provision of Art 19, in which case you must annotate the chartaccordingly. If you choose not to simulate the performance history you should comply with Art 15(2), "UCITS withperformance of less than 5 complete calendar years shall use a presentation covering the last 5 years only" andproduce a KID with a 5-year scale or rely upon a representative share class KID.Q. Extending the example above, in the case that the share classes used different benchmarks (for example, ifthere were foreign currency hedged share classes, each measured according to a specially constructedcurrency hedged benchmark), could each share class and its benchmark be shown on the same chart?A. It is unlikely that several share classes and their separate benchmarks could be shown on a single KID without"making the document too complicated or crowded" (Recital 13 of the EU Regulation 583/2010). Practitioners wouldbe wiser to present the share classes on several KIDs or choose a representative share class if it is possible.Q. If a benchmark is changed, how should the chart of past performance be displayed for the periodpreceding the change?A. Each benchmark should be shown only in respect of the periods in which it was relevant to the UCITS.ALFI KID Q&A, Issue 1314, 11 April25 September 2012 Page 27
Page 4: IndexPart 1 EU Regulation 583/2010
Page 9 and 10: "Management Company:", which would
Page 11 and 12: Q. Will it be compulsory to use a g
Page 13 and 14: Art 7(1)(b)Q. Information on the in
Page 15 and 16: Chapter 3, Content of Sections of t
Page 17 and 18: Currently published SRRI value: 5Is
Page 19 and 20: decide what is materially relevant
Page 21 and 22: Q. If switch charges are applied in
Page 23 and 24: A. Yes, we think that both designs
Page 25: Art 16Q. Past performance "shall be
Page 29 and 30: Chapter 3, Content of Sections of t
Page 31 and 32: Chapter 4, Particular UCITS Structu
Page 33 and 34: Q. The EU Regulation 583/2010 reque
Page 35 and 36: annual update process. The practiti
Page 37 and 38: Art 38(2)(b)Q. Can deemed consent b
Page 39 and 40: Q. If the shares of a UCITS are hel
Page 41 and 42: Q. Is the management company oblige
Page 43 and 44: Q. It may be hard to tell apart abs
Page 45 and 46: Q. Who should be in charge of the S
Page 47 and 48: Part 3CESR/10-674CESR's guidelines
Page 49 and 50: Page 5, Para 6(b)Q. Does this parag
Page 51 and 52: Q. Should average net assets be cal
Page 53 and 54: Part 4Using KID in distribution net
Page 55 and 56: The following diagrams (which are n
Page 57 and 58: Q. Art 80 of the UCITS IV Directive
Page 59 and 60: the subscription in the future, dem

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